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Meridiam in second, €1bn Spanish highway deal

The Paris-based fund manager – together with Acciona and Cintra – has been awarded a 30-year concession for a stretch of Spain’s A66 highway. The road deal is Meridiam’s second in Spain, after the same team signed up to build a €150m portion of the A334 freeway in Almeria.

Meridiam, the Paris-based fund manager focused on Europe and North America, has inked its second deal in Spain after it has been awarded a €998 million public-private partnership (PPP) contract to build and operate a stretch of the A66 highway.

The greenfield-focused fund manager – together with Spanish developers Acciona and Cintra – will build a 49-kilometre portion of the highway connecting the cities of Gijon and Seville. Spain’s infrastructure ministry, Fomento, said the winning proposal cut down the availability payments the concessionaire will be entitled to receive over the life of the 30-year PPP contract by 26.4 percent.

Unlike previous Spanish road concessions, which carried varying degrees of traffic risk, newer contracts do not carry demand risk. Instead, concessionaires are paid a certain amount from the public authorities in exchange for making the roads available in good condition.

The A66 contract attracted attention from a number of bidders, including a team featuring rival European Union-focused greenfield fund Marguerite, which had teamed up with Spanish construction companies FCC, Sacyr and Comsa for the project.

For Meridiam, the A66 contract represents its second-ever deal in Spain. In mid-March, the fund manager said it had reached commercial close for a 30-year concession to build and operate 40-kilometres of the A334 freeway in Almeria, also as part of a consortium with Acciona and Cintra.

Launched in 2006, Meridiam specialises in long-term project funding and management in Europe and North America and has around €2.4 billion under management.

It has recently been raising two new infrastructure funds: a €1 billion, European-focused fund, which it is said to have closed already; and a $1 billion North America-targeted vehicle, which is expected to wrap-up fundraising in the summer.

Towards the end of last year, Meridiam closed two deals: a design, build, construct, finance and maintain contract for a 53-kilometre stretch of highway in southern Finland; and the Nottingham Express Transit Phase Two project, involving the construction of new tram lines in the English city.